Brief Summary

Building Regulations — Approval of building plans — Interpretation of s 7(1) of the National Building Regulations and Building Standards Act 103 of 1977 — eThekwini Municipality's refusal to approve plans for a multi-level parking facility on the grounds of non-compliance with the Integrated Development Plan — Respondent sought court order compelling approval — Legal obligation of local authority to grant or refuse approval within statutory time frame — Court held that the municipality's failure to act constituted a breach of duty under s 7(1), warranting an order for approval.

Comprehensive Summary

Summary of Judgment

1. Introduction

The matter concerned an appeal to the Supreme Court of Appeal against an order granted by a High Court in motion proceedings. The dispute arose under the National Building Regulations and Building Standards Act 103 of 1977 and, in particular, the interpretation and application of section 7(1) dealing with a local authority’s duty to grant approval of building plans or refuse to grant approval within the statutory time-period, and the consequences of a failure to do so.

The appellant was the eThekwini Municipality (the local authority responsible for building plan approval in the relevant area). The respondent was Tsogo Sun KwaZulu-Natal (Pty) Ltd, the developer of a phased casino complex at the Village Green site near Durban’s Snell Parade.

In the court a quo, Tsogo Sun launched an application seeking relief framed under section 8(1) of the Act, which permits a court to compel a local authority to perform its section 7 duties where it has failed to grant or refuse approval timeously. The High Court granted an order directing the Municipality to grant or refuse approval within five days, and further granted declaratory relief to the effect that the proposed parkade was not prohibited by the applicable integrated development plan and planning scheme regulation, and did not breach a specified contractual provision in the deed of sale. The Municipality obtained leave to appeal to the Supreme Court of Appeal.

The general subject-matter of the dispute was the Municipality’s response to Tsogo Sun’s submission of building plans for a multi-level parking facility (parkade) required as part of amendments to Tsogo Sun’s casino licence conditions, and whether the Municipality had refused approval (triggering the statutory internal appeal under section 9) or had failed to decide (permitting court intervention under section 8).

2. Material Facts

Tsogo Sun had been engaged for several years in a phased development of a casino complex at the site known as The Village Green. The development occurred within the area regulated by the Municipality’s Durban Town Planning Scheme (in the course of preparation). The site’s zoning, Special Zone No 84: Village Green, was regulated by scheme clauses. Of central importance was a clause providing that, in the case of a casino development, no buildings or structures were to be erected unless in accordance with an Integrated Development Plan approved for the entire Special Zone.

It was common cause that an Integrated Development Plan (IDP) existed, had been approved, and had been amended from time to time. For the purposes of the dispute the applicable version was the July 2002 IDP. The IDP was not merely a conventional plan, but a planning instrument consisting of text and drawings.

Tsogo Sun purchased the site from the Municipality in November 2001 under an agreement of sale. The agreement recorded, among other matters, that the property would be developed substantially in accordance with the IDP and relevant regulatory conditions. While the Supreme Court of Appeal regarded the deed of sale provisions as largely peripheral to the main statutory question, the agreement formed part of the background to the declaratory relief granted in the High Court.

In November 2004, Tsogo Sun (through BKS Engineers) submitted three sets of plans to the Municipality pursuant to section 4(1) of the Act. Two of these plans (demolition of a recreational facility and a temporary parking lot) were not material to the outcome in the Supreme Court of Appeal. The third plan, Plan No. 611/11/04, was for the construction of a multi-level parking facility. The parkade was required by amended casino licence conditions and was expected to be completed by a specified date.

After correspondence in which Tsogo Sun demanded that the Municipality approve the lodged plans, Tsogo Sun’s attorneys asserted that the 60-day period contemplated by section 7(1) had expired and threatened an application under section 8(1). The Municipality responded by letter dated 31 January 2005. The letter stated that the application did not comply with the July 2002 IDP and “therefore cannot be considered” until either the application complied with the IDP or the IDP was amended with Council approval. The letter further indicated that, once those matters were attended to, the plans would be given “further consideration”, set out a “note” substantially reflecting the content of section 7(5) regarding re-submission within one year without additional cost, and asked Tsogo Sun to collect the plans.

Tsogo Sun nonetheless launched an application on 25 February 2005. The central factual divergence between the parties in that application was not about what the letter said, but about what it meant: Tsogo Sun contended it amounted to a failure to decide (or an avoidance/postponement), whereas the Municipality contended it constituted a refusal to approve.

The High Court treated the Municipality’s notification as equivocal and not communicating either approval or rejection, and it granted both the section 7-direction (to decide within five days) and additional declaratory relief regarding IDP compliance and contractual breach. The Supreme Court of Appeal noted that the declaratory relief had not been sought in the notice of motion and that no clear procedural foundation for it appeared from the record, but it proceeded to address the substantive correctness of that relief.

3. Legal Issues

The central legal question was one of statutory interpretation and application of law to fact, namely whether the Municipality’s letter of 31 January 2005, properly construed in context, constituted a decision to “refuse to grant its approval” in terms of section 7(1)(b) of the National Building Regulations and Building Standards Act 103 of 1977.

Flowing from that was a remedial and procedural issue: if the letter amounted to a refusal under section 7, whether Tsogo Sun was required to pursue the internal statutory appeal to the review board under section 9(1), rather than approaching a court directly under section 8(1) (which is aimed at situations where the local authority fails timeously to grant or refuse approval).

A further issue, arising from the High Court’s declaratory order, was whether the proposed parkade could be said to be not prohibited by the IDP and the planning scheme regulation (in particular, the clause requiring buildings to be “in accordance with” the approved IDP), and whether the High Court’s approach to that question was legally sound.

To the extent that the declaratory relief also referred to a clause in the deed of sale, the dispute implicated a contractual interpretation element, but the Supreme Court of Appeal treated this as irrelevant to the statutory decision on plan approval and addressed it only because declaratory relief had been granted.

4. Court’s Reasoning

The Supreme Court of Appeal approached the matter by first clarifying the meaning of section 7 of the Act, and in particular the statutory choice between approval and a refusal to approve, as well as the function of section 7(5) which permits re-submission in certain circumstances.

A key part of the reasoning was the distinction drawn between an outright “rejection” of an application and a “refusal to approve” contemplated by section 7(1)(b). The court indicated that the Act does not require a local authority to “reject” plans; it requires it to grant approval or refuse to grant approval. The court emphasised that “refusal to approve” can be flexible and may allow for reconsideration under section 7(5), whereas “rejection” may suggest a more final termination. This distinction mattered because the High Court’s reasoning proceeded on the basis that the notification did not reflect an approval or a “rejection”, which the Supreme Court of Appeal regarded as a misdirection as to what section 7 requires.

Having established that a “refusal to approve” must nonetheless be unequivocal, the court interpreted the Municipality’s letter as a whole and against the statutory framework. It reasoned that the letter conveyed that the Municipality had considered the application, that it did not approve the plans as submitted (as inferred from the statement that certain items had to be addressed before “further consideration” could occur), and that the Municipality had provided a reason for non-approval, namely non-compliance with the July 2002 IDP. The inclusion of the substance of section 7(5) and the request that Tsogo Sun collect the plans were treated as further indicators that the letter was not merely delaying or avoiding a decision, but communicating a refusal capable of reconsideration upon amendment.

On that interpretation, section 8(1) was not an available route, because section 8(1) addresses a failure by the local authority to decide timeously. Once there had been a refusal, the statutory scheme provided a remedy by way of an appeal to the review board under section 9(1). The court rejected the contention that the declaratory issue justified bypassing this mechanism, particularly because it was conceded that the review board could decide preliminary interpretive issues as well.

The Supreme Court of Appeal then dealt with the correctness of the declaratory relief regarding the IDP and planning scheme compliance. It held that the Municipality’s scheme-in-preparation had the force of law, that the Municipality had a duty to observe and enforce it, and that scheme clauses regulating a zoning area were enforceable as law. Importantly, the clause applicable to Special Zone No 84 prohibited buildings unless they were in accordance with the approved IDP. The court reasoned that, to the extent that the IDP related to buildings (including its text and drawings), it was effectively incorporated into the town planning scheme for purposes of enforcing the clause. On that basis, the IDP operated as “any other applicable law” for purposes of section 7(1)(a) when determining whether an application complied.

Against that legal framework, the court considered the respondent’s submission that the IDP was merely conceptual and should not rigidly constrain later development. The court rejected this as inconsistent with the plain requirement of the scheme clause, holding that the clause did not become unenforceable merely because its prescriptions might need updating. The remedy for rigidity or outdated provisions lay in amending the town planning scheme, not disregarding the scheme’s requirements in the building plan approval process.

The High Court had been influenced by the fact that the IDP did not refer expressly to the construction of a parkade, and it framed the declaration negatively as “not prohibited”. The Supreme Court of Appeal held this was an erroneous approach because the scheme clause required a positive finding that the building was “in accordance with the IDP”. In circumstances where the indicative plan in the IDP did not depict the proposed parkade and instead showed an open parking area laid out under a landscape plan, the High Court could not properly make the necessary positive finding of accordance. It followed that the declaratory relief relating to IDP compliance ought not to have been granted.

On the contractual declarator, the Supreme Court of Appeal treated it as irrelevant to the section 7 approval decision, but noted that the Municipality did not pursue an argument that the submission or approval of the plans would breach the relevant contractual clause. It further held that the respondent’s suggestion of improper influence arising from the Municipality’s negotiation stance remained speculative on the papers, and did not displace the statutory and scheme-based foundation for the Municipality’s refusal.

In relation to costs, the court took into account that the declaratory relief had apparently been introduced late (on the version before it, first raised in heads of argument) and that the respondent’s success in the High Court was insufficient to justify a favourable costs disposition once the appeal succeeded.

5. Outcome and Relief

The Supreme Court of Appeal upheld the Municipality’s appeal. It set aside the order of the court a quo and replaced it with an order dismissing Tsogo Sun’s application.

The court ordered that Tsogo Sun pay the costs of the appeal, including the costs of two counsel. It also ordered that the application in the court a quo be dismissed with costs, including (to the extent applicable) the costs consequent upon the employment of two counsel.

Cases Cited

No reported case law was cited in the judgment.

Legislation Cited

National Building Regulations and Building Standards Act 103 of 1977 (sections 4(1), 7(1), 7(5), 8(1), 9(1))

Town Planning Ordinance 27 of 1949 (Natal) (section 56(1) and section 77, and the definition of “town planning scheme” in section 1, as referenced)

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The Supreme Court of Appeal held that the Municipality’s letter of 31 January 2005, properly interpreted in context and with reference to the statutory scheme, constituted an unequivocal refusal to grant approval of the building plans in terms of section 7(1)(b), rather than a failure to decide. As a consequence, the respondent was required to pursue the statutory remedy of an appeal to the review board under section 9(1), and the court a quo ought not to have entertained an application under section 8(1).

The court further held that the town planning scheme clause requiring buildings to be “in accordance with” the approved IDP was enforceable as law, that relevant IDP provisions were effectively incorporated for this purpose, and that the High Court erred in granting declaratory relief framed on the basis that the parkade was “not prohibited” without the necessary positive finding of accordance with the IDP.

LEGAL PRINCIPLES

A local authority’s decision under section 7(1) of the National Building Regulations and Building Standards Act 103 of 1977 must be understood as either a grant of approval or a refusal to grant approval; the statutory scheme does not require a “rejection” of plans as such, and “refusal to approve” may be capable of reconsideration under section 7(5).

A notification of refusal to approve must be unequivocal, but may legitimately indicate the steps required for reconsideration under section 7(5). The return of plans and reference to re-submission mechanisms may support the interpretation that a refusal has been communicated rather than mere delay.

Where a refusal has been communicated, the statutory structure provides an internal remedy by way of appeal to a review board under section 9(1), and an application under section 8(1) (addressed to failures to decide timeously) is not the appropriate procedural route.

A town planning scheme (including scheme clauses regulating a particular zoning) has the force of law, and a local authority is obliged to enforce it. Where a scheme clause prohibits building unless in accordance with an approved planning instrument (such as an IDP), the relevant provisions of that instrument are enforceable for that purpose, and compliance with such provisions may constitute compliance with “any other applicable law” for purposes of section 7(1)(a).

When a scheme clause requires a building to be “in accordance with” an approved planning instrument, a court’s inquiry is not satisfied by the absence of an express prohibition; it requires a positive basis to conclude that the proposal accords with the instrument.

eThekwini Municipality v Tsogo Sun KwaZulu-Natal (Pty) Ltd (86/2006) [2007] ZASCA 38; ; 2007 (6) SA 272 (SCA) ; [2008] 1 All SA 6 (SCA) (28 March 2007)